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Strategy as Algorithm

Note from Noah: I’ve been trying to blog more recently and posted this over on my personal blog. It felt like something I could expand on and post here, so I’m going for it.

Strategy, like innovation and lots of other business buzzwords, seems to mean less the more it’s mentioned. I thought this definition, from Lawrence Freedman (who I’ve never heard of) via Martin Weigel’s blog is a nice one:

Strategy is much more than a plan. A plan supposes a sequence of events that allows one to move with confidence from one state of affairs to another. Strategy is required when others might frustrate one’s plans because they have different and possibly opposing interests and concerns… The inherent unpredictability of human affairs, due to the chance events as well as the efforts of opponents and the missteps of friends, provides strategy with its challenge and drama. Strategy is often expected to start with a description of a desired end state, but in practice there is rarely an orderly movement to goals set in advance. Instead, the process evolves through a series of states, each one not quite what was anticipated or hoped for, requiring a reappraisal and modification of the original strategy, including ultimate objectives. The picture of strategy… is one that is fluid and flexible, governed by the starting point and not the end point.”

This fits with a thought I have had lately around how strategy is really about building algorithms (rules) that help drive optimal outcomes in decisions. Basically you’ve identified what you ultimately want to accomplish and strategy is how you drive towards that. The challenge, as outlined here, is that nothing’s ever quite as neat and tidy as we might hope. So rather than talking about strategy as a blueprint (or similar), which suggests everything is in its perfect place down to the millimeter, it’s better to think about it as an algorithm that helps you make the right decision as you traverse whatever landscape you happen to encounter. Algorithms are nothing more than a set of rules applied to any information or situation, which takes into account what you understand about the data and tries to find the best answer according to the ideas/ideals the programmer has set forth.

There are lots of interesting implications for this, but I think two of them are particularly useful to discuss here.

What does it mean for marketing?

For marketers, I think the idea of strategy as algorithm can be most easily translated to thinking about building blocks. The job of a marketing is ultimately about driving growth for the organization and the question a marketer tries to answer with strategy is “What combination of audience, channels, business objectives, and brand pillars will deliver the best end result?”

Essentially each of these building block intersections carries with it a specific set of instructions on how the brand should behave/communicate. Put more simply: If you’re talking to moms on Facebook with the objective of driving them to store, then we know our brand pillar around product effectiveness is the best to design a campaign around. The challenge with this way of thinking, of course, is that brands communicate across an ever-increasing set of audiences and channels and so the combinations are nearly endless. This precisely describes a complex system and we know that the best way to work within a system like that is to have a simple set of rules that govern how the brand behaves. Anything more would be a fool’s game.

What does it mean for culture?

At Percolate we talk about culture as the internal manifestation of brands (more about this in a future blog post). One of the things I talk about with everyone who starts here is that the reason we believe in investing in the culture of the company is that culture is how we teach people to make on-brand decisions. Basically, as the company grows we know we need to distribute out decision-making as much as possible. The goal, of course, is for the decisions people make to be good ones in the eyes of the brand. The way we make sure of that is by ensuring that everyone has a clear understanding of the values of the company.

Just like the marketing example, this is about identifying the end goal (our vision is to create software that helps build the best brands in the world) and creating a simple set of rules that help guide the decision-making that will happen along the way to achieving that objective. While we have spent a lot of time articulating the values and cultural underpinnings, the next step we’re going through now is to try to further codify them down to a simple set of statements and questions that people can ask themselves when they’re faced with a decision. Essentially we’re trying to build the Percolate values algorithm.

What’s the conclusion?

Really I’m terrible at conclusions, but people tell me I need them, so I’ll take a shot. When people talk about strategy, at least in any sort of complex system (aka the real world), you should think about how you create a simple set of rules to guide decision-making instead of an airtight plan to follow. The realities of the universe dictate that strategies need to be flexible, not rigid, and I like thinking of them as an algorithm: a framework anyone can follow to ensure (or come as close to ensuring as possible) that what they’re doing is on-brand and aligned to the objectives and vision of the organization.